Money is known to be anything that serves as a medium of exchange, a unit of account, and a store of value.
Medium of exchange is anything that is used to determine value during the exchange of goods and services.
Barter is the direct exchange of one set of goods or services for another.
Unit of account is a means for comparing the value of goods and services.
Store of value is something that keeps its value if it is stored rather then used.
Currency is the coins and paper bills used as money.
Commodity money is objects that have value in themselves and that also used as money.
Representative money is objects that have value because the holder can exchange them for to pay debts.
The three uses of money is money as a medium of exchange, money as a unit of account, and money as a store of value.
The six money characteristics include durability, portability, divisibility, uniformity, limited supply, and acceptability.
Sources of money value are commodity money, representative money, and fiat money.
Money serves as a store value by, being something that you can store in the bank or somewhere else rather then using it.
An example of commodity money is objects that have value in themselves and that also used as money. Representative money is objects that have value because the holder can exchange them for something else of value. Fiat money is money that has value because the government has ordered that it is an acceptable means to pay debts.
The United States currency has value because the government has made a value for our paper bills, and coins, allowing us to exchange this in a variety of ways.
The disadvantages of commodity money are the fact that it is not portable, durable or divisible.
Continentals became worthless because people came to believe that they would not be able to redeem their bills for gold and silver coins.
9. I would use a gold or silver because that is actually worth money. Papers that we have now are basically worthless because it is paper.
10.2 Outline (pay attention to FDIC...it will be on the final)
A bank is an institution for receiving, keeping, and lending money.
National bank is a bank that is chartered, or licensed, by the national government.
Bank runs is a widespread panic in which great numbers of people try to redeem their paper money.
Greenback paper currency is issued during the civil war.
Gold standard is a monetary system in which paper money and coins are equal to the value of a certain amount of gold.
The Federal Reserve System is the nation’s central banking system.
Central bank is a bank that can lend to other banks in times of need.
Member bank is a bank that belongs to the Federal Reserve System.
Federal Reserve note is the national currency we use today in the United States.
The great depression was a severe economic decline that began in 1929 and lasted for more then a decade.
The federal deposit insurance corporation is the government’s agency that insures customer deposits if a bank fails.
The first bank of the United States was a strong central bank the next was a national banking system.
Some of the problems included bank runs and panics, wildcat banks, fraud, and many different currencies.
The Federal Reserve System reorganized the federal banking system by, having member banks, Federal Reserve board, short term loans, and Federal Reserve notes.
Some of the earlier problems were deregulation, high interest rates, bad loans, and fraud.
10.3 Outline and answer > #1-4
Money supply is all the money available in the United States economy. Liquidity is the ability to be used as, or directly converted to, cash.
Liquidity is the ability to, use as, or directly convert cash.
Demand deposit is the money in checking accounts.
Money market mutual fund is a fund that pools money from small savers who purchase short-term government and corporate securities.
Fractional reserve banking is a banking system that keeps only a fraction of funds on hand and lends out the remainder.
Default is a failure to pay back a loan.
Mortgage is a specific type of loan that is issued to buy real estate.
Credit card is a card that entitles its holder to buy goods and services based on the holders promise to pay back the amount borrowed.
Interest is the price you pay when you borrowed money.
Principal is the amount of money borrowed.
A debit card is a card that is used to directly withdraw money from your account.
A creditor is a person or institution to whom money is owed to.
The difference between M1 and M2 is that M1 is money that people can gain access to easily and immediately to pay for goods and services. This means cash and M2 is M1 plus funds that can’t be used as cash directly, but can be changed easily such as deposits.
Debit card is cash you have in checking account (no interests) Credit cards are used for borrowing cash and then paying it back with interest.
Three services that banks provide are savings, checking, and credit unions.
Banks must balance profit and security when making loans because they don’t want to give money to high risk accounts and lose money.
- Money serves as a store value by, being something that you can store in the bank or somewhere else rather then using it.
- An example of commodity money is objects that have value in themselves and that also used as money. Representative money is objects that have value because the holder can exchange them for something else of value. Fiat money is money that has value because the government has ordered that it is an acceptable means to pay debts.
- The United States currency has value because the government has made a value for our paper bills, and coins, allowing us to exchange this in a variety of ways.
- The disadvantages of commodity money are the fact that it is not portable, durable or divisible.
- Continentals became worthless because people came to believe that they would not be able to redeem their bills for gold and silver coins.
9. I would use a gold or silver because that is actually worth money. Papers that we have now are basically worthless because it is paper.10.2 Outline (pay attention to FDIC...it will be on the final)
10.3 Outline and answer > #1-4